Friday, August 13, 2010

Seven-year-old Gabriel Meyers didn't want soup for lunch one Thursday in April, 2009. When his 23-year-old foster brother sent Gabriel to his room for dumping his soup in the trash, Gabriel threatened to kill himself. He kicked his toys around his room, then locked himself in the bathroom.

Police reports say Gabriel was home sick that day from his elementary school in Margate, Florida, under the care of Miguel Gould, his foster father's son. Around 1 p.m., city police responded to Gould's frantic 911 call and found Gabriel had hanged himself.

A troubled child who had previously suffered from neglect, sexual assault and abusive parenting, Gabriel spent the previous year shuttling among several foster parents while taking a constellation of anti-psychotic medicines, including Lexapro and Vyvanse, to control his depression and attention deficit hyperactivity disorder. Like most children in Florida foster care, Medicaid paid Gabriel's medical expenses.

Just one month before his suicide, Gabriel's doctor prescribed him Symbyax, an anti-depressant restricted for treatment of children. The medication's FDA-required label features a warning that use of the drug by children or teenagers can lead to suicide.

Symbyax does not meet criteria established by Congress for Medicaid reimbursement, so it is illegal for Medicaid to pay for a prescription of the drug to a child. Sohail Punjwani, the doctor who prescribed Symbyax for Gabriel, received a stern letter from the FDA about his history of over-prescribing mental health drugs.

According to a number of foster care experts who spoke with Politics Daily, children in foster care, who are typically concurrently enrolled in Medicaid, are three or four more times as likely to be on psychotropic medications than other children on Medicaid. Alarmingly, many of these drugs are medically prohibited for minors and dangerous to the children taking them. Often young patients under state supervision are also prescribed three or four high-risk drugs at a time -- all paid for by Medicaid.

State foster care programs and child protective services have had mixed success addressing the pervasiveness of dosing their clients with prescription psychotropic drugs. Using federal Medicaid money to purchase dangerous prohibited prescriptions for children, which cost the government up to $600 per dose, is technically a violation of the law.

Now, the Senate Subcommittee on Federal Financial Management, chaired by Sen. Tom Carper (D-Del.), has asked the Government Accountability Office to look into the drugging of foster care children. The investigators will attempt to account for estimates in the hundreds of millions of dollars of possible fraud arising from prescriptions for drugs explicitly barred from Medicaid coverage. The GAO is collecting data from Oregon, Massachusetts, Florida, Maryland, Minnesota and Texas, to search for patterns of abuse. This effort marks the first time suspicion of Medicaid fraud related to psychotropic drugs has been examined at the federal level. According to Senate staffers working on the investigation, the committee will likely hold hearings on the matter later this year.

Psychotropic medications act on the central nervous system and alter brain function, mood and consciousness. The GAO investigation is chiefly focused on anti-depressants, widely used in foster care in dangerous combinations, and for so-called "off-label" uses to treat symptoms for which they have not been medically approved. Anti-psychotic medications have been a factor in a number of children's deaths.

Statistics on psychotropic drugs in foster care have until now come out in scattered reports, mostly from investigations of foster care failures by individual states. For example, in 2003 a Florida Statewide Advocacy Council study found that 55 percent of Florida's foster children were being administered psychotropic medications. Forty percent of them had no record of a psychiatric evaluation. Another Florida report also indicated anti-psychotic medication use increased an astonishing 528 percent from 2000 to 2005.

A Texas state study in 2004 revealed that 34.7 percent of Texas foster children were prescribed at least one anti-psychotic drug -- and 174 children aged 6-12 in the care of the state were taking five or more psychotropic medications at once.

Last April, an investigation by the Atlanta Journal-Constitution exposed several companies operating foster care homes in Georgia repeatedly used anti-psychotic medications to "subdue" children in their care. Despite being cited repeatedly, none of the agencies were fined more than $500.

According to child care experts and assessments by both advocacy groups and state government agencies, many states lack efficient records management and adequate oversight of foster care, contributing to a pervasive lack of medical continuity for the children. Social workers have oversized caseloads of foster children, who are often shunted between families and prescribed anti-psychotics from doctors unfamiliar with their medical histories. Without a case history, experts and foster care alumni say, doctors are more likely to add medications than take them away, resulting in record numbers of children dispensed several anti-psychotic medications at once. In many cases, the drugs are prescribed off-label to youngsters with behavior problems.

Julie Zito is a professor of pharmacology at the University of Maryland who conducted a 2008 study of the texas foster care system that found 41 percent of the children prescribed psychotropic drugs received three or more different medications. She told Politics Daily what little research has been done suggests children in foster families are rarely assessed properly, a failure leading to serious effects. There has been no research on multiple-drug regimens, Professor Zito explained, and "blitzes" of medication have become a pervasive way of dealing with behavior problems in foster care. "We've expanded the medication practice in response to children not getting better," she said, and children who fail to improve, "are getting more medication."

Pharmaceutical companies manufacturing psychotropic drugs have played a major role in encouraging their increased use on foster care clients. Drug companies participate in aggressive marketing, conduct misleading research about efficacy and safety, and in some cases, "bribe" psychiatrists to prescribe their drugs, according to Zito and Jim Gottstein, an Alaska lawyer and founder of the Law Project for Psychiatric Rights, who has mounted several lawsuits against pharmaceutical corporations.

For example, last year the St. Petersburg Times reported that a psychiatrist in Jacksonville, Florida, was paid for speaking engagements to encourage her to prescribe Seroquel, a drug used to treat bipolar disorder and schizophrenia, and a neurologist in Tampa received free trips to Spain and Scotland from AstraZeneca, the drug's British manufacturer, for her innumerable prescriptions of the drug for headaches. Seroquel is the top-selling anti-psychotic drug in the United States, with more than $4 billion per year in worldwide sales. AstraZeneca recently paid $520 million to settle lawsuits -- some brought by doctors who had been offered swag in exchange for prescriptions -- over its illegal promotion of off-label uses for Seroquel.

According to Jim Gottstein, the increase of anti-psychotic use in foster care amounts to "drug companies sacrificing children's lives on the altar of corporate profits." Gottstein recently filed a citizen's suit on behalf of the state of Alaska against several doctors, drug companies and insurance companies, claiming that they knowingly promoted Medicaid fraud.

Reform Attempts

In response to the devastating study of the Texas system in 2004, that state's top health agency introduced a new set of guidelines stressing specific treatment goals for medication and "informed consent" of parents and guardians. That effort led to decreased use of psychotropic drugs relative to the number of children enrolled in foster care from 2002 to 2009, according to data from the Texas Health and Human Services Commission.

In May 2005, Florida expanded foster parents' rights to reject psychotropic treatment for the children in their care. Four years later, however, a review found that the new requirements were being flauted, and the panel that investigated Gabriel Meyer's suicide concluded that every level of the Florida system had missed "warning signs" that Gabriel's care was inadequate. Thirteen percent of Florida foster children were on one or more psychotropic drug, and 16 percent of those were not approved by parents or guardians.

In 2008, Rep. Jim McDermott (D-Wash.), the only psychiatrist in Congress, introduced a bill titled Invest in KIDS Act, which included stronger oversight for prescription medications in foster care. McDermott held a hearing on the use of psychotropic drugs in foster care, but the bill died in committee. Near the end of George W. Bush's second term, Congress passed a law, co-sponsored by McDermott, that included increased oversight for "mental health" in foster care, but did not specifically mention psychotropic drugs.

"Some children in foster care may need and benefit from psychotropic medication," McDermott told Politics Daily. "But these drugs should not be used as a shortcut to treat foster children when more effective treatments, including counseling, might provide long-term benefits."

Federal and state agencies have pursued drug companies that illegally market their drugs for off-label uses, a practice that experts say heavily contributes to the overuse of psychotropic drugs in foster care.

Last year, a Justice Department action against Pfizer led to a $2.3 billion settlement, the largest in the department's history. Companies convicted of major health fraud are barred from participating in Medicaid and Medicare. But worrying that a conviction would cause Pfizer to fail and cost its employees their jobs, the government allowed Pfizer's shell company, which exists solely to plead guilty in lawsuits, to be charged instead, and the drug company paid a fine. Pfizer maintains that it did not break the law.

In 2006, The New York Times obtaine a batch of internal documents that showed Eli Lilly, the maker of Zyprexa, a medication approved exclusively for treating the severe mental illnesses of schizophrenia and bi-polar disorder, was suppressing information on the drug's harmful side effects and advertising it illegally. Lilly paid $62 million to settle lawsuits with 32 states and the District of Columbia, and agreed to ensure that its marketing complied with the law.

How to Fix It

The problems that lead to drug abuse in foster care are complex and deeply entrenched, but activists and advocates have proposed a number of solutions for limiting the overuse of anti-psychotics. Foster care experts, including a current task force of the American Academy of Pediatrics, believe that getting foster children a "medical home" -- one physician who manages their care over the long term and has access to relevant records -- would reduce the overprescription of psychotropic medications.

"Having a drug to take the edge off the pain and fear and sadness saved my life a time or two, but it's not a lifestyle." said Misty Stenslie, a former foster child who is currently the deputy director of Foster Care Alumni of America. Children under the protection of government agencies deserve the assurance of safe and decent health care. Especially, as Stenslie points out, "We can't give kids what they really need, and that's a family and love."

Monday, August 9, 2010

For years, Internet advocates have warned of the doomsday scenario that will play out on Monday: Google and Verizon will announce a deal that the New York Times reports "could allow Verizon to speed some online content to Internet users more quickly if the content's creators are willing to pay for the privilege."

The deal marks the beginning of the end of the Internet as you know it. Since its beginnings, the Net was a level playing field that allowed all content to move at the same speed, whether it's ABC News or your uncle's video blog. That's all about to change, and the result couldn't be more bleak for the future of the Internet, for television, radio and independent voices.

How did this happen? We have a Federal Communications Commission that has been denied authority by the courts to police the activities of Internet service providers like Verizon and Comcast. All because of a bad decision by the Bush-era FCC. We have a pro-industry FCC Chairman who is terrified of making a decision, conducting back room dealmaking, and willing to sit on his hands rather than reassert his agency's authority. We have a president who promised to "take a back seat to no one on Net Neutrality" yet remains silent. We have a congress that is nearly completely captured by industry. Yes, more than half of the US congress will do pretty much whatever the phone and cable companies ask them to. Add the clout of Google, and you have near-complete control of Capitol Hill.

A non-neutral Internet means that companies like AT&T, Comcast, Verizon and Google can turn the Net into cable TV and pick winners and losers online. A problem just for Internet geeks? You wish. All video, radio, phone and other services will soon be delivered through an Internet connection. Ending Net Neutrality would end the revolutionary potential that any website can act as a television or radio network. It would spell the end of our opportunity to wrest access and distribution of media content away from the handful of massive media corporations that currently control the television and radio dial.

So the Google-Verizon deal can be summed up as this: "FCC, you have no authority over us and you're not going to do anything about it. Congress, we own you, and we'll get whatever legislation we want. And American people, you can't stop us.

This Google-Verizon deal, this industry-captured FCC, and the way this is playing out is akin to the largest banks and the largest hedge funds writing the regulatory policy on derivative trading without any oversight or input from the public, and having it rubber stamped by the SEC. It's like BP and Halliburton ironing out the rules for offshore oil drilling with no public input, and having MMS sign off.

Fortunately, while they are outnumbered, there are several powerful Net Neutrality champions on Capitol Hill, like Nancy Pelosi, Harry Reid, Henry Waxman, Jay Rockefeller, Ed Markey, Jay Inslee and many others. But they will not be able to turn this tide unless they have massive, visible support from every American who uses the Internet --- whether it's for news, email, shopping, Facebook, Twitter --- whatever. So stop what you're doing and tell them you're not letting the Internet go the way of Big Oil and Big Banks . The future of the Internet, and your access to information depends on it.

Sunday, August 1, 2010

Iran is one of the world's most significant nations in terms of history, culture and intellectual capacity, and is matched in the Middle East perhaps only by Israel.

It is a small wonder, then, that when Iran's hard-line and irascible president talks of building military capability and destroying Israel, Tel Aviv feels its survival is menaced and that Tehran's regime is its nemesis.

For all of its 61 years in existence, Israel has considered itself in a permanent war of survival. It has developed a national system which places great emphasis on its military and intelligence capabilities.

Starting from scratch, Israel has developed technologies which are truly world-leading, especially in the delivery of shock and awe on any potential enemy.

For the early part of its statehood, Israel had shared the support of the United States, as its protector and military hardware supplier, with the Shah's Iran.

When a belligerent Saddam Hussein took power in Iraq, both the Shah and Israel were uneasy and often co-operated in exploiting technology, both US and home-grown in Israel.

There is documented evidence that Israel supplied Iran with communications equipment and the supporting paraphernalia needed to allow both countries (and probably the US Central Intelligence Agency) to eavesdrop on Iraq.

The great divide

The Iranian Revolution changed all that and since 1980, Israel and Iran have grown apart. So far apart, in fact, that there is a real risk of armed conflict between the two states.

What makes the world sit up and take note is that Israel is a nuclear power with delivery systems which can reach Iran – and Iran is, according to US experts, just two years away from creating a nuclear strike capability of its own.

US experts believe Iran will be able to produce nuclear weapons material in the next few months.

For Jordan, Iraq and Saudi Arabia – and even the Gulf states - this is particularly worrying as any nuclear-tipped missiles would fly overhead no matter who launches them.

In addition, Israel has a sophisticated - and tested - anti-missile system called Arrow, which could knock out a potential Iranian first strike. The problem for Israel's neighbours is not the technology but where the debris might fall if the Arrow were ever to be used.

Israel has watched with growing horror as the rhetoric from Mahmoud Ahmadinejad, the Iranian president, stokes tensions and as Tehran appears to be determined to create a full nuclear weapon capability.

Israel has taken steps to improve its nation's defences and its long-range strike capability. There is no doubt that the Israeli military could mount a successful air strike against targets in Iran and certainly that the Jericho series of ballistic missiles could hit targets with great accuracy.

Unwanted scenarios

But it is also clear that any such first strike would provoke clear and rapid hostile reactions around the world, especially from moderate Arab nations with whom Israel seeks accord and co-operation against Iran, as well as by the European Union and others opposed to first strike operations – in favour of a self-defence option.

The Middle East peace process would be indirectly destroyed and Iran's proxies in Lebanon and Gaza would probably enter the fray against Israel.

Israeli interests worldwide could also be threatened.

Iran is not yet in a position to launch a first strike against Israel. This is perhaps a key concern because Israel has a reputation for not allowing a first strike capability to develop.

It has a record of destroying the Egyptian ballistic missile industry under Gamal Abdel Nasser, the late Egyptian president; destroying French-built Iraqi nuclear reactors outside Baghdad at Osirak in 1981, and interdicting the supply of arms moving through Sudan as recently as January this year.

Nevertheless, Iran has had a series of short-range ballistic missiles for three decades, having developed them for the 'War of the Cities' during the war with Iraq. Much of the technology was originally bought from Pakistan and later North Korea.

There is Russian and Chinese technology extant as well – even technology bought commercially in electronics supermarkets in Japan as a report in Jane's Defence Weekly revealed 15 years ago.

But creating a weapon in sufficient numbers and capability to destroy key targets in Israel is a different matter.

Even if Iran had a nuclear device now, it would take some time to 'weaponise' it to create a first strike capability. North Korea is struggling with same problems which leads many to believe there is a union of need between the two otherwise unlikely bedfellows.

Black market technologies

Iran's defence industries have created good technologies of their own since the US-inspired arms embargo which followed the cessation of hostilities with Iraq in 1988. Battlefield weapon systems were developed from black market Russian missiles and by some clever adaptations of US technology.

For example, Iran's military took medium-range air-to-air missiles (originally exported to Iran in the time of the Shah for the F-14 Tomcat and F-4 Phantom fleets) and reconfigured the guidance systems from air-to-air to air-to-ground.

Israel has also seen Iran, under Ahmadinejad, support both Hezbollah and Hamas. Recent military operations in South Lebanon in 2006 and against Hamas in Gaza in 2009 have witnessed a haul of Iranian-supplied systems.

Israel has put extreme diplomatic pressure on Russia about the extent of weapons sales to Iran. The unlikely alliance between Iran and Syria has also contributed to Israel's unease and feeling that it is - like in the early 1960s - surrounded by potential aggressors.

Washington's anti-Iran stance under George Bush, the former US president, led to speculation that the US would provide the technology for Israel to launch a conventional bombing raid – or rather series of raids – against Iranian nuclear facilities in known locations near Shiraz and Isfahan.

What to bomb?

The problem for Israel in mounting such operations would not be the technology of reaching the target areas, nor destroying those seen, or even the opposition of neighbours, but actually detecting the right facilities.

Iran, using North Korean advisers, has managed to bury and hide its main facilities. This makes a first strike difficult in military terms while the risk of collateral damage makes it impossible in political terms.

Israel has been trying a charm offensive with some moderate Arab states. It has highlighted that the physical and political fallout stemming from Ahmadinejad's more aggressive posture would be damaging for all.

Israel's case has not been helped by Operation Cast Lead, the name it gave its offensive against Hamas in Gaza last January.

Ahmadinejad's inauguration for a second term after the disputed elections is another factor. Traditionally, leaders under pressure in hard-line states have used military adventures to divert public opinion.

One only has to remember the actions of the Argentine Junta in 1982 when it invaded the Falkland Islands or actions in Northeast Africa over several decades.

Military and intelligence organisations look at a nation's potential threat by examining key attributes.

These are 'military capability' – could a nation actually carry out a military strike; "political will" – does a nation actually want to expend that much treasure and 'blood'; "an understanding of the consequence" – does the nation's leadership understand where the ripple caused by its casting of a stone into the pool of peace would stop?

Hard-line versus unpredictable

Taking each nation in turn – Israel has the military capability of a nuclear or non-nuclear strike against Iran and hence the war experience of 1967, 1973 and 1982 to fall back upon.

The current government in Tel Aviv is hard-line enough to both take the action and to ride out the political storm.

But it is also pragmatic and - despite its inability to understand the West's clear opposition to its housing policies in Jerusalem and the West Bank - guarded in its use of military force on a regional scale.

US posture is also a determining factor in any decision to strike. The fate of three US tourists apparently being held by Iran could further bolster the position of US hawks on Iran in the Obama administration.

Iran, on the other hand, is completely unpredictable, especially given the competing power structures within the country.

It has a recent history of meddling in the affairs of its neighbours, like the fledgling Iraq, and launched a million men and young boys in human waves against Saddam Hussein's armies dug in along the border in the 1980s.

The religious leaders of the time seemed quite happy to allow this wholesale slaughter without any sign of remorse. So the question remains, would Iran's leadership launch a nuclear strike against Israel?

Today, it cannot because the technology is not there. Will it at some time in the future if Iran were to ever develop such means?

The rest of the world can only hope that sense prevails in Tehran and the internal situation is resolved in a way that does not 'force' Ahmadinejad to take the 'nuclear option' – not literally, but by creating the conditions for war in order to reinforce his own embattled and increasingly fragile position as leader.

Saturday, July 31, 2010

With Congress gridlocked on an immigration bill, the Obama administration is considering using a back door to stop deporting many illegal immigrants - what a draft government memo said could be "a non-legislative version of amnesty."

The memo, addressed to U.S. Citizenship and Immigration Services Director Alejandro Mayorkas and written by four agency staffers, lists tools it says the administration has to "reduce the threat of removal" for many illegal immigrants who have run afoul of immigration authorities.

"In the absence of comprehensive immigration reform, USCIS can extend benefits and/or protections to many individuals and groups by issuing new guidance and regulations, exercising discretion with regard to parole-in-place, deferred action and the issuance of Notices to Appear," the staffers wrote in the memo, which was obtained by Sen. Charles E. Grassley, Iowa Republican.

The memo suggests that in-depth discussions have occurred on how to keep many illegal immigrants in the country, which would be at least a temporary alternative to the proposals Democrats in Congress have made to legalize illegal immigrants.

Chris Bentley, a USCIS spokesman, said drafting the memo doesn't mean the agency has embraced the policy and "nobody should mistake deliberation and exchange of ideas for final decisions."

"As a matter of good government, U.S. Citizenship and Immigration Services will discuss just about every issue that comes within the purview of the immigration system," he said in an e-mail statement. "We continue to maintain that comprehensive bipartisan legislation, coupled with smart, effective enforcement, is the only solution to our nation's immigration challenges."

He said the Homeland Security Department "will not grant deferred action or humanitarian parole to the nation's entire illegal immigrant population."

The memo does talk about targeting specific groups of illegal immigrants.

Mr. Grassley said it confirms his fears that the administration is trying an end-run around Congress.

Friday, July 30, 2010

GUATEMALA - The trial of 14 alleged members of the Mexican drug cartel Los Zetas continued Thursday in the case of 11 Guatemalan drug traffickers killed in Zacapa department in 2008.

According to prosecutors, the killings were part of a fierce battle between a Guatemalan drug gang and the Mexican cartel Los Zetas for control of smuggling routes through Guatemala.

The clash between the two cartels revealed the presence in Guatemala of Mexico's powerful drug mafia, especially Los Zetas, considered to be the armed wing of the Gulf Cartel.

However, not all the defendants attended the hearing on Wednesday; two of them, a Mexican and a Guatemalan, remained in prison because authorities feared a rescue attempt, and they followed the hearing via videoconference.

Defense lawyers tried to suspend the hearing, calling it illegal, but were unsuccessful.

The prosecutor's office says it has more than 500 pieces of evidence linking defendants to the 2008 murders and other crimes, including illegal weapons possession, armed robbery and forgery.

El Paso Times is reporting that Rogelio Segovia "El Royser" Hernandez was arrested on Tuesday in Chihuahua City in possession of weapons and grugs. Police report that Segovia is the key cartel player in drug trafficking, kidnapping and homicides. The arrest comes on the back of the killing of top Sinaloa cartel leader Ignacio "Nacho" Coronel who was shot by Mexican military on Thursday.

Wednesday, July 28, 2010

Last week, bank failures quietly passed the 100 milestone for the year. I say “quietly” because the bank failure story has gone largely unreported or, at least, under-reported by the mainstream media. Just to give you an idea of how fast the bank insolvency problem is accelerating, last year, at this time, 64 banks had been taken over by the Federal Deposit Insurance Corporation. So far, this year, 103 banks have already been taken over by the FDIC. There is no question the bank failures the FDIC will have to deal with will be greater than the 140 insolvent banks closed last year. At this point, we just don’t know how many more, but dozens more than last year for sure.

One big bank negative I see is the loss of business in the Gulf because of the oil spill catastrophe. I don’t think it is a stretch to say that the loss of revenue from fishing, deep-water oil drilling, tourism and spoiled coastal property will probably have a negative effect on the balance sheet of Gulf Coast banks. Just 2 weeks ago, a Wall Street Journal story documented tail spinning Florida banks asking for a break from federal regulators. It said, “Florida banks—already weakened by the real-estate bust and hit again by customers suffering from the BP PLC oil spill—are asking federal regulators for a reprieve from government-ordered capital raising as they struggle to stay alive.” (Click here for more on the WSJ article) There are currently 775 “problem” banks on the FDIC’s list, and I don’t think that list will be shrinking anytime soon.

In order for the FDIC to close the banks, it has to spend cash to make depositors whole. It is also entering into what are called “loss share” agreements. It is a way to keep problem loans and foreclosed property in a banking environment and not become the full responsibility of the government. It also caps the loss for the buying institution. Here’s how the “loss share” basically works. The FDIC writes down the assets to an estimated value. Then, the FDIC covers any potential losses in an 80/20 split, with the FDIC covering 80% of any potential loss. These loss share agreements were used in the S&L crisis in the early 90’s. Since this crisis began, there have been $173.5 billion of loss share agreements through May of 2010. (The total now stands at more than $178 billion.) According to FDIC spokesman David Barr, if loss share agreements were not used, the failed bank assets might sell for “pennies on the dollar.” The idea is to wait and sell the assets in the future when they might be worth more. Barr told me just last week, “As the FDIC turns those losses into real losses when we sell those, then the loss at the failed bank is adjusted accordingly, some go up and some go down.”

If the economy continues to tank, make no mistake, there will be some liability to the FDIC. We just will not know how much until the assets are sold. There might be no future liability at all, but I don’t think that’s likely given the serious and prolonged problems facing the economy. This is probably a multi-billion dollar future write down, but who knows?

The bank closings are also taking a toll on the FDIC’s Deposit Insurance Fund, or DIF. In May, it was reported to be $20.7 billion in the red. Back then, I wrote a post called, "FDIC Insurance Fund still $20 billion in Hole." I said, “I talked with FDIC spokesman David Barr yesterday about the shortfall in the DIF. He said, “The FDIC is not broke.” It has an additional “$63 billion in cash.” He told me there is about $46 billion in three years of prepaid deposit insurance premiums and an additional $17 billion in cash for a grand total of $63 billion in “liquid resources” to close insolvent banks.”

If you subtract the $20.7 billion deficit of the DIF from the roughly $63 billion in “liquid resources,” you end up with a little more than $42 billion. FDIC Chairman Sheila Bair was quoted, around the same time, saying the FDIC expects to spend “$40 billion” closing banks in the next year. (Remember, this was before anyone knew how big the Gulf oil spill calamity was going to be.) My math says that would leave a little more than $2 billion in “liquid resources.” According to an email from David Barr yesterday, after that $2 billion is used, there is a “. . . 100 billion line of credit (from the Treasury). The FDIC also has some $35 billion in assets from failed banks that we must sell.”

That means in about a year, the FDIC will be closing banks with borrowed money and what it can get from selling the assets of failed banks. If that doesn’t paint a dire picture of bank insolvency in this country, I don’t know what does. It is amazing to me how little time the mainstream media is spending on this unfolding financial disaster and how much time it is devoting to things like Mel Gibson’s rants.

Tuesday, July 27, 2010

[SWClarion note: Some alarming news items have come to light in the UK claiming that Social Services are operating in aquota system for taking new born babies directly from their parents. In the US we are getting closer to the point where poverty itself will be enough to criminalize parents.]

In recent months, I have been reporting on what is one of the most alarming scandals in Britain today – the secretive system that allows social workers to remove children from loving families without any proper justification, and to send them for adoption or fostering with no apparent concern for their interests.

Four more examples have come to light in the past week. The first came to my attention via Lynn Boleyn, a former councillor from Dudley, who first became concerned about "forced adoption" when she sat on various committees concerned with child care. Last week, she was in court with a mother of five girls, whose family tragedy began when her partner was sentenced to 14 years for abusing the eldest girl, who was sent to live with a relative. Although there was no evidence of their mother harming them in any way, the other four girls were seized by Dudley social services and placed in foster care. Three were kept together, separated from their two-year-old sister whom the council now wants to put out for adoption.

The three girls, aged 11, 10 and 7, are desperately unhappy, constantly asking to be reunited with their mother. But on Friday, a judge said he had no power to stop social services summarily withdrawing them from their local school to be sent to a new home. The 11-year-old was looking forward to being in the school play and the end of term Leavers' Service. She has now been torn away from friends she has known since she was four, the nearest thing to stability left in her life. The children's wishes were not taken into account.

A second case concerns another woman, for 20 years an NHS nurse who served with the Royal Army Medical Corps in the first Gulf War. Until recently, she was a semi-professional dog breeder, living happily at home with her eight-year-old son (his father having walked out when she was pregnant).

In March, their home was raided by two RSPCA officials and five policemen, complaining she had too many dogs in the house. Her home was untidy because she was clearing an attic, but the seizing of the dogs (breaking the leg of one of them) left it a befouled mess.

Acting on a tip-off from the RSPCA, Leeds social workers then intervened, and expressed surprise that the house was tidier than they expected. Nevertheless, they told the mother to bring her son's clothes to school, from where he was taken into foster care.

After three months, during which he has only been allowed short supervised "contact" with his mother, the boy is miserable, constantly asking when he can return home. His mother has repeatedly had to draw the social workers' attention to various conditions, such as head lice and threadworm, which indicated that he was not being properly cared for. Last week they announced that they were moving him to another foster home.

Although there was no evidence that she was anything other than an admirable mother, apart from the temporary mess made of the house in March, the social workers say her son cannot be allowed home until they have both undergone "psychiatric assessments". These cannot be arranged until October. Nor has the boy yet been given a guardian to represent him, as the law lays down.

My other two cases come from Ian Josephs, the former county councillor and businessman who runs the Forced Adoption website and has helped hundreds of families in a similar plight. When, in January, a couple brought their newborn son to hospital with a fractured arm, Coventry social services were called in on suspicion that the child might have been injured by his parents. After the mother had been arrested, handcuffed and held by the police for nine hours, the couple were terrified that their baby would be taken from them. Although not charged with any offence, they are on police bail, which prevents them from leaving the country.

The child's Irish grandmother took the baby to Ireland, where he is now surrounded by a large, supportive family. Social services are attempting to get an order through the courts for the grandmother to return to England with the baby.

My last case is so shocking that I will return to it in more detail at a later date. It centres on a London couple who, earlier this year, had their six children seized by social workers on what appears to be flimsy hearsay evidence (I have seen the court papers).

The mother was pregnant again. Last month, after the boy was born, three social workers and five policemen entered the hospital ward where she was breastfeeding at 3am, wresting the baby from her by force. They then discovered that they had nowhere to keep him. The boy was put into intensive care, where his mother was taken to breastfeed him for four days, until she was fit to leave the hospital. She saw her baby for the last time two weeks ago.

I will return to this story when I have had some explanation from the council responsible.

Monday, July 26, 2010

Insight has more details on an alleged slush fund for the L.A. Superior Court Judges Association and the possible extortion of civil litigants by some officers of the court.

As the old Neil Diamond song has it, "L.A.'s fine, the sun shines most the time and the feeling is laid back." Sunny L.A. is so laid back that alleged corruption within the Superior Court of Los Angeles goes unchecked and nary a thought is given to investigate possible connections of ongoing criminal indictments to schemes and players already exposed (see "Is Justice for Sale in L.A.?" May 3).

But Marvin Bryer of La Crescenta, Calif., is anything but laid back. A retired computer analyst, Bryer spent years collecting court and bank documents concerning suspicious financial relationships between attorneys, court professionals and judges of the Superior Court. After Insight exposed the secret "coffee-and-flowers" bank account of the Los Angeles Superior Court Judges Association, or LASCJA, Bryer filed a lawsuit against the Family Court Services Special Fund, one of the names used by the LASCJA.

Bryer contends in his lawsuit that, among other things, the LASCJA was using a "bogus" name to mute money to its own bank account gained from minimum continuing legal education, or MCLE, classes and other lawyer-supported ventures associated with the Superior Court. Because the LASCJA illegally was using the County of Los Angeles employer identification number, or EIN, it still is unclear whether the money deposited into the judges' account belonged to the taxpayers of Los Angeles or to the judges -- a question Bryer hopes to have answered by his lawsuit.

Bryer's lawsuit also names Alf Schonbach, manager of the Finance, Accounting and Internal Audits Section of the Superior Court, in an attempt to determine why Schonbach's statements to Insight that the funds collected from lawyers for the MCLE classes and deposited into the LASCJA account contradict his previous declarations that they came from "donations."

"I want the truth about the accounts," says Bryer, "and the money illegally collected by the judges' association returned to the taxpayers of the County of Los Angeles."

Bryer thinks he sees an intricate financial connection in ongoing criminal cases he believes may be related to his investigation into the LASCJA and the county personnel who handled the judges' bank accounts.

For instance, Bryer has included in his lawsuit Gregory Pentoney, an auditor in the Los Angeles Superior Court finance office. A subordinate to Schonbach, Pentoney was arrested in August 1998 on multiple counts, including grand theft, receiving and offering a bribe and preparing false documentary evidence. Pentoney, along with Encino attorney Robert Fenton, is accused of participating in stealing more than $1.4 million from the Los Angeles County by recovering money that the county owed to various municipalities and kept it in condemnation trust accounts.

Condemnation funds are monies deposited into trust accounts that are equal to what is offered by the municipality for property condemned under eminent domain. Pentoney is accused of providing a list of condemnation cases to Fenton, who then submitted requests for disbursements of more than $5 million from the trust accounts on behalf of various municipalities. Fenton allegedly collected $1.4 million in finder's fees from the municipalities and kicked back $463,000 to Pentoney.

At the time Pentoney allegedly was working with Fenton to convert money from the condemnation funds, he also was sparring with Bryer over the LASCJA's bank account. In response to a 1996 lawsuit filed by Bryer, Pentoney claimed in a deposition that while in the finance office he had no knowledge of the Family Court Services Special Fund, which now is known to be one of the names used by the LASCJA for its accounts. Perhaps, but Pentoney's legal representation was provided not by his employer, the County of Los Angeles, but by Robert Traver of Collins, Collins, Muir & Traver in Pasadena -- the law firm that represents the judges. Bryer suspects a cover-up.

Today, Pentoney is being sued in a civil action in the Van Nuys Superior Court and criminally charged in Los Angeles Superior Court for his alleged participation in the condemnation trust-fund scheme. Also, as a defendant in the civil lawsuit filed by Bryer concerning checks processed by the finance office for the Family Court Services Special Fund, Pentoney is being represented by Michael Bergfeld -- another attorney with Collins, Collins Muir & Traver.

Bergfeld says in court documents that he was hired by the County of Los Angeles to represent Pentoney. "This is weird," says Bryer, "because this guy is being both represented and prosecuted by Los Angeles County. How can this be?" Pentoney's supervisor tells Insight he, too, is receiving similar assistance from the county through Collins, Collins, Muir & Traver. Schonbach also is a defendant in Bryer's lawsuit and is a witness in Pentoney's criminal case.

Although some see representation of Pentoney and Schonbach by the judges' law firm as a conflict of interest, Superior Court Presiding Judge Victor Chavez doesn't have a problem with it. "If he was working for the judges' association at the time I don't see a problem. I don't see an ethical issue," says Chavez. In fact, Schonbach was working for the judges' association -- but he was being paid by the County of Los Angeles.

Sunday, July 25, 2010

Richard Fine has now been incarcerated in the LA Men's Central Jail for 529 days

Former attorney Richard Fine filed a Writ of Habeas Corpus one day after his incarceration on March 6, 2009. That motion has been denied from the state through the federal courts. One reason that has been cited by the various courts for denial is that on March 18, 2008 Judge Yaffe (the judge residing over Marina Strand Colony II vs County of Los Angeles) ordered that Richard Fine had no standing in petitioning that Judge Yaffe disqualify himself on grounds that Judge Yaffe received benefit payments from LA County because Richard Fine was no longer an attorney. It has come to light that Judge Yaffe filed a Minute Order with the US District Court on July 13, 2010 in which he states that The March 18, 2008 order does not exist. Richard Fine insists that this fact should nullify later orders and should nullify US Courts decisions to deny his Writ of Habeas Corpus. Read more about Richard Fine on the Full Disclosure Network.

Thursday, July 22, 2010

Let us not forget that President Obama forewarned America during the presidential election by speaking of the 'sacrifice' that all Americans were going to have to endure. What did he mean by this? Shortly after Greece's sovereign debt bonds were downgraded by the three headed monster(Standard & Poors, Moody's and Fitch) the banking cabal came up with a gross acronym to describe Portugal, Ireland, Italy, Greece and Spain, PIIGS. This shows the mentality of the kind of people who have no compunction about compelling sovereign nations to cut jobs, cut spending and slash citizen's way of life by massively cutting pensions and benefits that greatly effect the old and the young. To bankers like the IMF and their GoldmanSachs alumni these people are PIIGS, nothing but dirty swine to be herded into massive pens of austerity.

PIIGS and beyond

Massive austerity did not end with the PIIGS. Shortly after Greece broke out in violent protests against the austerity, economic rumblings began in Spain and Portugal. And just when the white anglo-saxon community thought that it was immune to the sovereign debt crisis, the IMF went after England telling them to cut their debt, thus causing the British Pound to go into near freefall. Just last month Finance Minister George Osborne presented a budget that would cut over a million jobs in the next five years. Ireland is poised to take to the streets over their impending austerity measures. So who will be the next little 'PIIGy'? Could it be the steward of the world's reserve currency? Never!

China and the IMF onslaught

But it's true. Earlier this month the International Monetary Fund(IMF) began urging the US to cut its budget deficit. Then, true to form, the advice proceeded what seems to be inevitable these days to those unfortunate enough to come under the scrutiny of the IMF. Downgrading. Like a German blitzkrieg the dollar is coming under attack from all sides. Recently China's Dagong Global Credit Rating Co. downgraded the US' sovereign debt bonds from AAA to AA status. On June 29 the UN released a report calling for an end to the US dollar as the main global reserve currency, citing its inability to safeguard value. A recent CNN Money article declared, "Central banks start to abandon the US dollar". In the article the author references some names that are the very architects of the financial crisis:

"There are those who would argue that the financial crisis was caused by over-enthusiastic worship of the Almighty Dollar. Call it brutal financial karma, but that church is looking pretty empty these days.

A new report from Morgan Stanley analyst Emma Lawson confirms what many had suspected: the dollar is firmly on its way to losing its status as the reserve currency of the world. We already knew that central banks have preferred gold to dollars, and that they're even selling their gold for cash; now, according to Lawson's data, it seems that those central banks prefer almost anything to dollars."

Financial Karma? Morgan Stanley is one of the major players behind the bank bailouts and the trillions of printed Stimulus dollars that are the basis of driving the value of the dollar into the abyss. This is like a bank loaning an unemployed man money to buy a car, and then turning around and calling the dealership to tell them that the man has no job!

Austerity ghouls

The end result of the tanking of the US dollar is clear. First a major downgrading of US sovereign debt, and then massive austerity measures for the American people. Public and private pension funds and retirement trusts in the US alone are worth multi-trillions of dollars. The hedge fund hyenas and bankster criminals want that money. When austerity comes the money that people collect for their pensions will at the very least be cut in half, some people will lose their pensions outright and future employees will simply have no pensions, all in the name of cutting the budget. Most of the money that will have been accumulated thus far will go to the people at the top. Don't think that this can happen? Just ask the people of Greece.

I recently pondered with a family member, Can the banks really just take your money? I then had to consider the facts:

Dateline 2001 Argentina defaults. When people go to the bank they can't get their money. When they finally do access their money it is only a fraction of what it was.

Dateline 2008 The US economy goes into freefall. This has a drastic impact on the three main banks of the tiny nation of Iceland. The banks completely default. Depositors get their money back but when all is said and done Iceland's stock market falls by 90% and their currency becomes greatly devalued. As of this date their are over 28,000 claims against Kaupthing Bank trying to recover over 40 billion euros

Dateline 2010 Germany's parliament passes a bill that will give 66% of it's annual income tax to banks in the form of interest payments

Dateline 2010 British Prime Minister David Cameron unveils a scheme to pay for public sector expenses. The government will draw from a new bank called, wait for it, the Big Society Bank. Where will the Big Society Bank get its money? The government plans to seize money from private bank accounts that they describe as 'dormant'. The British government wants the Big Society Bank to spend about 400 million pounds, but thus far there is only about 60 million pounds available from 'dormant' accounts. Where will the rest of the money come from?

So there you have it. Big whigs taking money directly from private bank accounts. I wonder what the families of these 'dormant' bank account holders have to say about this. By the way, the British government has told its citizens that if it takes their money accidentally that all they have to do is call them up and get it back. Good luck with that.